Precious Metals Weekly Outlook and Commodity Trading Tips
Gold Mcx August Indian Commodity Trading market sides in delivery followed the same pattern of foreign market during first three days. On Thursday we had an added event locally i.e. the Union budget. The FM refrained from touching the Gold import duty which impacted the MCX markets and raised the prices to Rs 28,496/10grams. We saw an intraday increase in Gold by over 3% whereas for the whole week, Gold for August settlement at MCX rose nearly 2.7% as equated to last week’s performance. The governments surprise to the Indian bullion markets by keeping the import duty on gold and silver unchanged at 10% is expected to continue limit overseas purchases however may continue to push smuggling which indirectly may result in prices remaining higher locally. What we mean to say, physical premiums in India as compared to international markets may once again start rising after the above act. As said on Thursday, Equity markets in the Europe slipped heavily while the Euro too came under pressure after Portuguese conglomerate EspĂrito Santo International SA delayed the repayment of shortterm debt sold to clients of its private bank in Switzerland. Into the other region the same day, unrest started in Gaza Strip as Bloomberg reported, Israel is mobilizing 20,000 soldiers for a possible ground invasion of the area to halt rocket bombardments on its south. Both these cues cumulatively pressed strong rally in Gold prices wherein after 14 weeks the commodity in Comex breached above the $1333.7 per ounce mark and pushing the commodity into a new zone at-least during the short-term. While looking at other major developments, gold prices got support out of modest increase in holdings from institutional segment. Holdings in the SPDR Gold Trust, the largest bullion-backed ETP increased moderately to 800 tons from 796 tons of prior week which touched this level after two month. Also last week the USD Index and US equity markets closed marginally on the lower side by 0.18% and 0.6% respectively which may have further supported the prices of yellow metal. During the coming week in the US, we feel the US Dollar and broader US economy might see some optimism as most set of economic cues over Manufacturing and Housing are likely to see amelioration. If we look at the other side of the Atlantic, Euro currency and regional equities though may continue to be under pressure after the developments over regional bond markets in the country. While positivity over US economy might make a negative case for Bullion commodity, overall we feel it might continue to take favour from financial problems in Europe and also fresh issues starting in the Middle East region. If one looks at the PVOI analysis for gold, one can see that rise in prices this week was conjugated with very strong increase in participation at Comex. While volumes increased by 24% for active August contract, OI came down by 13% which might be possible as traders booked profits at higher levels. Looking at the above aspect, we recommend building long positions only on small declines in the coming week
Gold Mcx Aug Weekly Trend: Up Support on down side at 27629-26900-26421 Resistance on Upper side at 28837-29317-29797 Trend Deciding Level at 28109 Silver Mcx Sep Commodity Trading Market, in their second week of July gave strong boost to the prices of whitish metal. During first three days of trade this week, prices of Silver Comex September contract were ranged, similar to the trend in gold commodity as stated above. The effect of turmoil in Gaza Strip affected Silver too and on Thursday it rose more than 2% to its highest price since March 17. Traders note that, Silver is heading for a sixth weekly advance, the longest run since April 2011. On weekly basis the prices of Silver changed nearly 1.6% at $21.52/Toz (Friday IST). In the Indian MCX market, during the first half of the week, prices market near similar performance wherein after no from Union Budget, it jumped over 3% that single day. For the week, local silver prices are higher around 2.5% with Silver and Gold prices also got further support from Rupee which depreciation by 0.7% during the week. In the coming week, we have similar stance on silver commodity as in the case with gold following the above mentioned cues over geo-political tensions in Middle east and fresh financial related problems in Europe. Next week as per the industrial space in concerned, we got to see some major updates from China as well where the Industrial Production number and the GDP reading for second quarter would be released. Particularly on the GDP front, most economists believe the reading to remain more or less stable near the 7.4% mark as seen in previous quarter. While Export/Import and Manufacturing related sectors have performed well lately, it adds to further signs that world’s second largest economy has bottomed out. In case we see a moderately better number, it would add more optimism in the world markets and mainly industrial commodities. With silver being a mix of both Precious and Industrial metal, it is likely to take added optimism out of the same. Cumulatively, we recommend buying the commodity from lower levels next week whereas traders can also take advantage of selling the Gold/Silver Ratio from higher levels Silver Mcx Sep Weekly Trend: Up Support on down side at 44963-43858-43139 Resistance on Upper side at 46787-47506-48224 Trend Deciding Level at 45682 Commodity Trading Tips Buy Gold Mcx Aug on Dips near 28100 sl 27660 Tgt 28550-28800 Buy Silver MCx Sep on Dips near 45600 sl 44600 Tgt 46300-